Portfolio losses behave asymmetrically relative to the remaining capital. When capital drops by 10 percent, we need an increase of 11.1 percent to return to the starting point. If losses are allowed to widen to 50 percent, the portfolio requires a 100 percent increase to break even.

This simple calculation is the basis for why we set a cut-loss limit on the close of the daily candle in the range of 8 to 12 percent from the entry price. Cutting losing positions early keeps the USDT cash intact to be allocated to the next setup.

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